Describing the cancellation of next week's Foreign Secretary-level talks as a "setback" to Indo-Pak ties, Pakistan on Monday defended its consultations with Kashmiri separatists, saying it was a "long-standing practice" to hold such meetings prior to bilateral parleys.

"The Indian decision is a setback to the efforts by our leadership to promote good neighbourly relations with India," the Pakistan Foreign Office spokesperson said in a statement.

The statement came after India today called off talks between Foreign Secretaries of the two countries scheduled to be held in Islamabad on August 25, telling Pakistan bluntly to choose between an Indo-Pak dialogue or hobnobbing with the separatists.

India cancelled the talks, raising strong objections to consultations held with separatist Hurriyat leaders by Pakistan High Commissioner Abdul Basit.

"It is a long-standing practice that, prior to Pakistan- India talks, meetings with Kashmiri leaders are held to facilitate meaningful discussions on the issue of Kashmir," the Pakistan Foreign Office Spokesperson said.

Stressing that Pakistan Prime Minister Nawaz Sharif has clearly articulated the vision of peace and development, the statement said it was in this spirit that the invitation of Prime Minister NarendraModi to attend his inaugural ceremony was accepted.

The meeting between the two Foreign Secretaries was scheduled at the directive of the two Prime Ministers, it said.

"Our High Commissioner in India has been informed by the Ministry of External Affairs that the Government of India, taking exception to the High Commissioner's meetings with Kashmiri leaders, has decided to call off the Foreign Secretary-level talks," the statement said.